Warranty Policy Research Articles

Carbon emission controlled investment and warranty policy based production inventory model via meta-heuristic algorithms

Over the last few years, manufacturing firms are required to take more action in order to control the carbon emissions from their activities. Again, the warranty of a product is an important factor for both buyers and manufacturers. However, due to uncertain market situations and fluctuations of customers’ demand, to conduct a detailed analysis of a manufacturing system is a complicated task. Primarily addressing these concepts together, in this work, an interval valued production inventory model is formulated under carbon taxation regulation in which demand is dependent on warranty period of the products. The main objective of this work is to determine the effect of warranty period of the products on the optimal policy of the production firm. Parallelly, this work also navigates the effect of carbon taxation regulation on the revenue of the manufacturer. There arises an interval optimization problem that is solved by centre-radius optimization technique. Further, to illustrate the validity of the model, a numerical example is considered and solved by different variants of quantum behaved particle swarm optimization (QPSO) techniques, grey-wolf optimizer algorithm (GWOA), teaching learning based optimizer algorithm (TLBOA), sparrow search algorithm (SSA). From the findings of numerical solution, it is observed that all the algorithms are equally efficient. Sensitivity analysis indicates that the centre of the average profit of the system increases most significantly as the initial demand rate of the products increases. Further, the warranty period of the products affects the optimal policy of the system in a suffice way and carbon taxation affects the revenue of the system less significantly. Finally, as a practical illustration of the model, another numerical example is taken into account considering the manufacturing and business strategies of LED monitor in a local manufacturing firm of Kolkata (India).

Warranty costs analysis under accelerated life test for power Ishita distribution with type-I censored data

PurposeIn this paper, the authors design accelerated life test and provide its application in the field of accelerated life test. The authors use maximum likelihood estimation method as a parameter estimation method.Design/methodology/approachIn this paper we design accelerated life test and provide its application in the field of accelerated life test. The authors use maximum likelihood estimation method as a parameter estimation method.FindingsIn this study, the authors design accelerated life test under Type-I censoring when the lifetime of test items follows PID and also provides its application in the field of warranty policy. The following conclusion is made on the basis of this study. (1) An inverse relationship is shown between the shape parameter with the expected total cost and expected cycle time, while the shape parameter directly relates to the expected cost rate (see Table 5). (2) A direct relationship is shown between the scale parameter with the expected total cost and expected time cycle, while the inverse relationship is shown with the expected cost rate (see Table 5). (3) An inverse relationship is shown between the replacement age and the expected cost rate, while there are direct relationships between expected total cost and expected time cycle (see Table 5).Originality/valueThis paper is neither published or neither accepted anywhere.

Optimal pricing for customized two-dimensional extended warranty policiesp

The price of extended warranty is an important factor that influences the revenue of warranty providers. The pricing of two-dimensional extended warranty is challenging due to various uncertainties of warranty purchasing time, risk attitude, and usage rates. This study develops a pricing model for twodimensional extended warranty policies. If extended warranty is purchased at the time of product sale (Case 1), a fixed extended warranty region is offered. If extended warranty is purchased upon the expiration of the basic warranty (Case 2), the customer will be provided with a warranty region based on the usage rate of basic warranty. The objective is to optimize the extended warranty price of Case 1 and to jointly optimize the warranty region and price for each warranty menu option of Case 2 by maximizing the profit of the warranty provider. Numerical examples are used to illustrate the effects of some key parameters on the optimal results.

Sand Supplier Selection Analysis Based on the Integration of Analytical Hierarchy Process (AHP) and Taguchi Quality Loss Function Methods

Supplier selection process is a step to evaluate and select the most suitable supplier to see the needs of the company or organization. This evaluation is important to ensure that the selected supplier is able to provide quality products or services, competitive prices, timely delivery, and meet ethical and sustainability standards. This research uses two methods, namely Analytical Hierarchy Process (AHP) and Taguchi Loss Function. AHP is used to calculate the weight of criteria, while the Taguchi Loss Function is used to estimate losses caused by suppliers. The criteria applied in supplier evaluation are quality criteria, product accuracy, delivery, price, warranty policy, and response to claims. The results obtained from this study PT. Bumi Makmur with a percentage loss of 21%, while the supplier that has the largest loss value is PT. Mergo Bopo with a percentage of 47%.
 Highlights :
 
 Integration of AHP and Taguchi Loss Function enhances supplier selection accuracy.
 Identified supplier exhibits substantial loss percentage, emphasizing the importance of thorough evaluation.
 Findings enable informed decision-making, facilitating risk mitigation and operational optimization
 
 Keywords :Supplier Evaluation; Sand; Analytical Hierarchy Process, Taguchi Loss Function

A Flexible Two-Dimensional Warranty in Optimizing the Dealer and Customer Satisfaction

Nowadays, in competitive market, in order to increase confidence in the quality of products, dealers set a warranty for selling them. This issue seems to have a tremendous effect on attracting more customers, especially when it comes to purchasing second-hand products. In this regard, this paper tends to present a two-dimensional warranty policy for second-hand products containing age and usage in two cases, L-shaped and Rectangular. Since maximizing customer repurchase probability is directly linked with dealer’s profit as well as minimizing costs, dealers ought to consider customer satisfaction. In fact, customer satisfaction depends on warranty length and the expected numbers of failures in the post-warranty period. To demonstrate the characteristics of the model, two comparative studies are conducted to present the effect of bi-objective function on warranty models. Finally, in order to extend insights into the matter, a sensitivity analysis is carried out on the varying parameters.

Imperfect maintenance policies for warranted products under stochastic performance degradation

Both customers and manufacturers benefit from warranties that effectively guarantee products’ performance with reasonable price and cost. Reliability-oriented degradation analysis has boosted the accuracy of lifetime prediction in the past decades and prompted additional maintenance and warranty options to manufacturers. In this paper, we present a systematic framework that aims to optimize imperfect maintenance policies for warranted products subject to stochastic performance degradation. We propose a novel objective-oriented imperfect repair scheme, and consider two scenarios corresponding to different types of products/systems. In the first one, warranties are claimed by customers in a random manner driven by performance degradation, whereas in the second one, the manufacturer offers periodic inspection services to customers and implements imperfect repairs if necessary. In both scenarios, we derive critical closed-form results to facilitate computation and optimization, from which managerial insights are gleaned. We find that (i) the randomness in customers’ claiming behaviors leads to remarkably more conservative warranty policies in which repairs are suggested to be more substantial; and (ii) the variable objective repair level in the imperfect repair exercise can effectively reduce the total maintenance cost over a finite warranty period. Overall, this work will equip practitioners with quantitative tools to prescribe optimal maintenance policies for warranted degrading products in various practical scenarios.

Optimization of Quality, Reliability, and Warranty Policies for Micromachines under Wear Degradation.

This work presents an optimization technique to determine the inspection, warranty period, and preventive maintenance policies for micromachines suffering from degradation. Specifically, wear degradation is considered, which is a common failure process for many Micro-Electro-Mechanical Systems (MEMS). The proposed mathematical model examines the impact of quality control on reliability and the duration of the warranty period given by the manufacturer or the supplier to the customer. Each of the above processes creates implementation costs. All the individual costs are integrated into a single measure, which is used to build the model and derive the optimal parameters of the quality and maintenance policies. The implementation of various levels of the quality, warranty, and maintenance policies are compared with their optimum level options to highlight their contribution to the assurance and improving product quality. To the authors' best knowledge, the introduction of a warranty period is implemented for the first time in the open literature concerning this type of optimization model for MEMs and surely can bring additional advantages to their quality promotion strategy. The proposed optimization tool provides a comprehensive simultaneous answer to the optimal selection of all the values of the design variables determining the overall maintenance and quality management approach.

Design of a performance-based warranty policy with replacement–repair strategy and cumulative cost threshold

Performance-based warranty policies have become increasingly popular because they can not only help customers hedge against uncertainty about product performance but also help manufacturers build credibility and drive sales. However, adopting a performance-based warranty policy imposes a greater financial burden on the manufacturer because performance guarantee level is typically higher than the physical failure threshold. Finding a balance between the increased willingness to purchase and the associated cost is a major challenge for manufacturers. In this study, we focus on restorable products and propose a performance-based warranty policy that includes a replacement–repair strategy and cumulative cost limit. The warranty terminates either when the product reaches an age limit or when the cumulative maintenance cost exceeds a predetermined limit. We have divided the warranty period into two compensation regions (i.e, replacement and repair region) to increase customer satisfaction and reduce the risk of breakdown. We also consider both positive and negative effects of imperfect repairs on performance deterioration. We compute the warranty servicing cost based on a product performance degradation model. The optimal pricing and warranty decisions can then be obtained by maximizing the overall profit. Moreover, we conduct comprehensive simulation studies to demonstrate the effectiveness of the proposed policy. The results prove that our proposed policy is win-win for both manufacturers and customers. Managerial suggestions are also given to provide guidance for implementing the proposed performance-based warranty policy.

Optimization of two‐dimensional warranty policy for repairable products based on age and usage, applicable to lemon law conditions

AbstractThis paper proposes a new two‐dimensional warranty policy based on two factors—age and usage—that simultaneously incorporates both the warranty period and the refund period for a repairable product with an increasing failure rate. In this policy, the product is warranted by taking into account both its age and usage, and the warranty expires when the product reaches a specified age or a specified usage, whichever comes first. One unique framework of the policy presented in this work is that, under a specific type of lemon law, it defines a refund period during which the manufacturer must either replace the purchased product or offer a full or partial refund to the buyer if the product fails in such a way that meets certain conditions involving either the number of failures or the length of each repair time. The refund period is generally assumed to be shorter than the warranty period, and each failure that occurs after the refund period is only minimally repaired until the termination of the warranty. In this article, we consider both age and usage in warranting a product and we define an age‐based univariate warranty period based on the usage rate. Under a specified cost structure, we evaluate the expected total warranty cost during the age‐based warranty period and determine an optimal age‐based warranty period from the manufacturer's perspective. We also suggest a heuristic method that can be used to obtain an optimal warranty premium for the two‐dimensional warranty policy considered in this study. Finally, relevant numerical examples are provided to analyze the proposed warranty policy.

Design of Random Warranty and Maintenance Policy: From a Perspective of the Life Cycle

Driven by digital technologies, it is possible that high-tech equipment management personnel use monitored job cycles to ensure products’ operation and maintenance over their life cycle. By means of monitored job cycles, this paper designs two categories of random maintenance policies: a two-stage two-dimensional free repair warranty (2DFRW) policy and a random hybrid periodic replacement (RHPR) policy. The 2DFRW policy is performed to ensure the product’s operation and maintenance over the warranty stage. Under such a policy, a product is minimally repaired at each failure, and regions of the second-stage warranty are set to be diverse to remove all inequities produced by limitations of the first-stage warranty. The warranty cost of two-stage 2DFRW is built and discussed. The RHPR policy is modeled to ensure the product’s operation and maintenance over the post-warranty stage. Under this policy, depending on the final expiry of the two-stage 2DFRW, a bivariate random periodic replacement (BRPR) policy and a univariate random periodic replacement (URPR) policy are skillfully used to reduce the maintenance cost over the post-warranty stage and maximally extend the residual useful time of the product through the warranty. The expected cost rate over the product’s operation and maintenance cycle is derived on the basis of renewal rewarded theorem. The optimal RHPR policy is analyzed by minimizing the cost rate. The presented models are numerically analyzed to explore hidden characteristics.

시뮬레이션을 이용한 한국형 레몬법의 보증비용 추정

In this paper, we study on the two-dimensional warranty policy of automobiles with a multi-level structure sold under the Korean Lemon Law. The Korean Lemon Law is a warranty law that allows consumers to request an exchange or refund from the manufacturer in the event of repeated failures and long repair times within one year or 20,000 km of driving distance after purchase. From a manufacturer

Trade-in price and base warranty length: A heuristic algorithm for concurrent optimization

The companies producing durable products consider various strategies to attract customers’ attention and maximize their profit. The two inseparable policies utilized by these companies are free-replacement warranty and Trade-in. Both policies profoundly impact customers’ buying behavior and producers’ profit. In this article, we investigate a monopolist manufacturer producing durable products over a horizon of two periods. This manufacturer simultaneously implements trade-in and base warranty policies for the products and proffers them to strategic customers. The goal is to find the optimal products’ prices, warranty length, and trade-in price, considering the influences of these parameters on the manufacturer’s profit in each period. According to the warranty length and the length of each period, we developed two mathematical models. In these models, the uniform and exponential distributions are deemed as the failure distributions of the products, and a heuristic solution algorithm is then proposed based on the problems' convexity. The numerical study showed that the optimal warranty length and trade-in price are contingent on production costs, failure distributions, innovation, and strategy level. In addition, it is concluded that a higher trade-in price should be offered if the manufacturer chooses without warranty policy.

Optimization of Renewable Warranty by Considering System Reliability and Preventive Maintenance and Repairs

One of the effective ways to ensure the reliability of the product sold is to consider service and warranty contracts. Important decision variables in warranty policies include determining the optimal warranty period and the optimal number of maintenance activities. In this research, a model has been developed with the aim of achieving the lowest expected cost rate in the life of the device and the appropriate reliability by performing the optimal number of preventive maintenance measures. The warranty policy in this study is renewable in two dimensions, in which two dimensions of repair time and failure time are considered. Any damage leading to repair is done free of charge by the manufacturer and damage leading to replacement is done jointly between the manufacturer and the consumer by agreement. As a result, two algorithms of Genetic and Imperialist Competitive Algorithm have been developed to solve the model and have been compared with numerical example solving. Furthermore, the shelfs life of the system and the number of optimal repair and maintenance measures for maintaining reliability required by the buyer were obtained.

A decision support system to evaluate the quality and warranty policies for remanufactured products

PurposeThis paper proposes optimisation models to evaluate and examine the selling of extended warranty policies in terms of improved profits in producing/marketing remanufactured products. These models are numerically solved using a quadratic programming solution approach and implemented in the decision support system (DSS).Design/methodology/approachThe purpose of this paper is to develop the optimisation models for a DSS and evaluate different warranty policies for buyers.FindingsThis study has demonstrated the flexibility and usefulness of a model-driven DSS for the quality and warranty management, which is applied to examine and evaluate different configurations (i.e. component reuse, rebuild and recycle) for remanufactured products and propose the selling of extended warranty policies for buyers.Research limitations/implicationsThe developed model-driven DSS can assist manufacturers to select and increase the number of components, e.g. to be reused, rebuilt, and recycled for producing a remanufactured product and propose suitable warranty policies for buyers. However, this study focusses only on the evaluation of warranty policies for specific remanufactured products in a DSS, i.e. types of air compressors for production operations in manufacturing industry.Originality/valueThis study developed optimisation models to be used in a DSS for proposing the selling of extended warranty of a remanufactured product to improve customer satisfaction and maximise the gained profits for manufacturers.

Two-dimensional extended warranty length design from incomplete warranty data based on a new price curve considering different maintenance policies

The extended warranty issue is concerned with additional after-sale protection for a consumer, at the cost of an extra premium. Depending upon the reliability and durability of the components or the system, the extension of warranty may be done with regard to either age or usage or both, for those specified components or the entire system. The age-based analysis is usually referred to as the one-dimensional problem, while age along with usage-based analysis is termed as the two-dimensional problem. By considering two factors, viz. premium ceiling and premium escalation rate, respectively indicating the maximum allowable premium and the rate at which the allowable premium is raised with the increased coverage, the present paper deals with the design of a new price curve based optimum extended warranty policies corresponding to perfect, minimal, and imperfect repairs, for both one- and two-dimensional problems. The availability and use of incomplete field data on age and usage, facilitate establishing the relative advantage of the two-dimensional modeling over its one-dimensional counterpart, while considering an extension of the baseline warranty coverage. The findings have been elaborated with the help of a synthetic real-life data.

Upgrading Strategy, Warranty Policy and Pricing Decisions for Remanufactured Products Sold with Two-Dimensional Warranty

The environmental sustainability and business benefits of end-of-life products have led to worldwide growth in the remanufacturing market. However, customers are often sceptical about the quality and durability of remanufactured products. To ensure a risk-free customer experience, dealers carry out some upgrading actions on the most critical components and offer a reasonable warranty period on products at the time of resale. It is crucial for dealers to consider customers’ attitudes and preferences when deciding on an upgrading strategy, warranty coverage, and sales price for remanufactured products. This paper aims to establish an equilibrium between customers’ expected costs and dealers’ expected profit for remanufactured products sold with a two-dimensional warranty and post-warranty service. In our model, customers make their decisions based on cost–benefit balance, whereas dealers make decisions that maximise their profit margin. Owing to the nature of the conflict between the dealer and customers, a Stackelberg game model is developed to optimise the upgrade strategy, warranty policy, and pricing decisions for remanufactured products. The Karush–Kuhn–Tucker (KKT) optimality condition of the lower-level problem is used to solve the model. Finally, a numerical example is provided to illustrate its applicability.

Optimum Post-Warranty Maintenance Policies for Products with Random Working Cycles

The working cycle of the products can be supervised by sensors and other measuring technologies. This fact means that by supervising the working cycle, the manufacturer can devise a warranty policy, and by continuing to supervise the post-warranty working cycle, the consumer can model the post-warranty maintenance. However, in the literature, there is no associated work. Integrating a renewing free-replacement warranty (RFRW) and the number of working cycles, this paper proposes a two-dimensional renewing free-replacement warranty policy, which can be applied to warrant the product and analyze the related warranty cost. By extending the warranty policy to the post-warranty maintenance model, we investigate two kinds of post-warranty maintenance models, including the uniform post-warranty maintenance model and the customized post-warranty maintenance model. For each post-warranty maintenance model, we provide an algorithm to seek the optimum solution. Finally, we provide some numerical experiments to demonstrate the model. The numerical results show that for the produced warranty cost, the traditional RFRW is higher than the proposed warranty policy, and the customized policy is inferior to the uniform policy.

Optimal preventive maintenance policies for products with multiple failure modes after geometric warranty expiry

In this paper, the optimal maintenance strategy for the warranty product subject to multiple failure modes and repair time limit is studied from the customer’s perspective. When the product fails, a minimal repair based on the failure type is conducted. If the product can not be repaired within a given time limit, it will be replaced with a new one by the manufacturer during the warranty period. Different from the traditional renewing warranty policy, a geometric warranty policy is adopted in this work, under which once the warranty product is replaced; the length of warranty period is geometrically renewed. After the warranty expires, the product undergoes preventive maintenance (PM) periodically and the PM effect is modeled by reducing the virtual age of different failure modes by different degree. The objective is to determine the optimal interval time for PM and the optimal number of PMs by minimizing the expected life cycle cost rate of product. The existence and uniqueness of the optimal PM policy are proved theoretically, and the optimal bivariate policy can be obtained by using a recursive seeking algorithm. Numerical examples illustrate the effectiveness of geometric warranty policy and the proposed PM model.

Reliability-Informed Economic and Energy Evaluation for Bi-Level Design for Remanufacturing: A Case Study of Transmission and Hydraulic Manifold

AbstractDesign for remanufacturing (DfRem) is one attractive strategy that encourages the reuse of a product and extends the product's life cycle. Traditional design processes often only consider product reliability at an early design stage. However, from the perspective of environmental sustainability, it is becoming increasingly important to evaluate the long-term economic and environmental impacts of design decisions during early-stage design. We propose a bi-level DfRem framework consisting of system-level reusability allocation and component-level design tradeoff analysis, considering reliability and product warranty policy. First, a system-level reusability allocation problem aims at a theoretical exploration of the design space where all the components comprising the system are allocated certain reuse rates to achieve target energy savings with minimum cost. Following the theoretical exploration at the system level, a component-level analysis looks at practical design options for each component and trades-off between the overall cost and energy consumption for multiple remanufacturing cycles. Both levels of the framework require modeling component reuse for multiple remanufacturing cycles, which we achieve by using a branched power-law model that provides probabilistic scenarios of reusing the component or replacing it with a new part. We demonstrate the utility of this framework with the case study of an infinitely variable transmission (IVT) used by some agricultural machines manufactured by John Deere and show snapshots of a prototype software tool that we developed for easy use by designers.

Random replacement policies to sustain the post-warranty reliability

PurposeThe study aims to design the limited number of random working cycle as a warranty term and propose two types of warranties, which can help manufacturers to ensure the product reliability during the warranty period. By extending the proposed warranty to the consumer's post-warranty maintenance model, besides the authors investigate two kinds of random maintenance policies to sustain the post-warranty reliability, i.e. random replacement first and random replacement last. By integrating depreciation expense depending on working time, the cost rate is constructed for each random maintenance policy and some special cases are provided by discussing parameters in cost rates. Finally, sensitivities on both the proposed warranty and random maintenance policies are analyzed in numerical experiments.Design/methodology/approachThe working cycle of products can be monitored by advanced sensors and measuring technologies. By monitoring the working cycle, manufacturers can design warranty policies to ensure product reliability performance and consumers can model the post-warranty maintenance to sustain the post-warranty reliability. In this article, the authors design a limited number of random working cycles as a warranty term and propose two types of warranties, which can help manufacturers to ensure the product reliability performance during the warranty period. By extending a proposed warranty to the consumer's post-warranty maintenance model, the authors investigate two kinds of random replacement policies to sustain the post-warranty reliability, i.e. random replacement first and random replacement last. By integrating a depreciation expense depending on working time, the cost rate is constructed for each random replacement and some special cases are provided by discussing parameters in the cost rate. Finally, sensitivities to both the proposed warranties and random replacements are analyzed in numerical experiments.FindingsIt is shown that the manufacturer can control the warranty cost by limiting number of random working cycle. For the consumer, when the number of random working cycle is designed as a greater warranty limit, the cost rate can be reduced while the post-warranty period can't be lengthened.Originality/valueThe contribution of this article can be highlighted in two key aspects: (1) the authors investigate early warranties to ensure reliability performance of the product which executes successively projects at random working cycles; (2) by integrating random working cycles into the post-warranty period, the authors is the first to investigate random maintenance policy to sustain the post-warranty reliability from the consumer's perspective, which seldom appears in the existing literature.